Facts of the Case

The petitioner challenged assessment orders passed under Section 153A of the Income Tax Act, 1961, contending that the assessment proceedings were completed without providing sufficient opportunity of hearing and in violation of principles of natural justice. The petitioner alleged that the assessment order was passed within a very short span of nine days, resulting in denial of adequate opportunity.

However, during the pendency of the writ petitions, it was admitted that the petitioner had already preferred statutory appeals against the same assessment orders before the Commissioner of Income Tax (Appeals). The tax demand raised under the impugned assessment orders was stated to be approximately ₹18–19 crores.

Issues Involved

  1. Whether a writ petition under Article 226 is maintainable when an alternative statutory remedy of appeal has already been availed?
  2. Whether allegations of violation of natural justice justify interference by the High Court despite the availability of appellate remedy?
  3. Whether the High Court should exercise discretionary writ jurisdiction against orders passed under Section 153A?

Petitioner’s Arguments

  • The assessment orders passed under Section 153A were legally unsustainable.
  • Adequate opportunity of hearing was not granted before passing the assessment orders.
  • The proceedings violated principles of natural justice.
  • The assessment order was passed in undue haste, within nine days.
  • The tax demand was substantial and the petitioner was not in a financial position to discharge the liability.

Respondent’s Arguments

  • The respondents contested the allegations regarding lack of opportunity.
  • It was argued that the petitioner had already availed the statutory appellate remedy.
  • The appellate authority was competent to examine both factual and legal objections, including the plea of denial of opportunity.
  • Therefore, the writ petitions were not maintainable.

Court Findings / Court Order

The Delhi High Court held that once the petitioner had already invoked the statutory appellate remedy against the assessment orders, parallel writ proceedings challenging the same orders could not be permitted.

The Court reiterated the settled principle that writ jurisdiction is ordinarily not exercised where an effective alternative statutory remedy exists, especially when such remedy has already been availed.

The Court observed that all contentions, including allegations of violation of natural justice and lack of fair opportunity, could be raised before the appellate authority.

Accordingly, the writ petitions were disposed of and the Court declined to entertain them on merits.

Important Clarification by the Court

The Court clarified that:

  • It had not expressed any opinion on the merits of the assessment.
  • The interim protection against coercive recovery would continue for five weeks to enable the petitioner to move an application for stay before the appellate authority.
  • Any adverse order passed in stay proceedings could be challenged in accordance with law.

Sections Involved

  • Section 153A – Assessment in case of search or requisition
  • Section 246A – Appealable orders
  • Section 250 – Procedure in appeal
  • Article 226 of the Constitution of India – Writ jurisdiction of High Courts

 Link to download the order - https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:9138-DB/SKN21022018CW6462017_170706.pdf

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